Markets got you down? Here are 8 ways to weather the storm: Don Pittis

Written By Unknown on Jumat, 17 Oktober 2014 | 22.40

The loonie is down. The commodities that Canada sells to the world have fallen. Stocks are down, then they're up. But no one knows what's next. When markets go haywire, it's easy to feel overwhelmed and helpless.

Here are eight ways to help you cope:

1. Spend less

It isn't necessarily good for the economy as a whole, but when you're not sure what's around the corner, paring back on spending gives you an extra margin of safety. Of course adding to your nest egg (or cutting debt) helps in the near term, but there is another advantage as well. Keeping your spending habit down is a gift that keeps giving in the event you suddenly find yourself needing to live on less, even in retirement. And the great thing is that if one day you find yourself saving too much, that is a problem easily rectified.  

2. Invest your money in something real

Put at least some of your hard-earned income into something that will show a real return no matter what financial markets do. Investing in your own education or that of a child creates real value, even if it is impossible to know exactly how much. Insulate your house. Install an efficient furnace. There will be real returns in lower heating costs. Same thing if you pay a little more for a car with good fuel economy. Pay down a loan or a mortgage and save a stream of future interest payments.

3. Avoid U.S.-dollar-based travel

Read number 1 again before taking this step. But if you are planning to holiday outside the country, go somewhere that is not U.S. dollar denominated. This calculator widget shows how world currencies have been trending against the Canadian dollar. Many economies, including those that use the euro, are cheaper than they would have been a month ago. Better yet, avoid currency exchanges altogether and plan a northern snowshoe holiday in Canada. 

4. Use scenario planning

When you aren't sure what will happen next, take a page from the business playbook. Scenario planning is used by some businesses to do a "what if" calculation based on various possible outcomes. In your own case, work out what would happen if you lost your job, if interest rates doubled, if your line of credit was called in and adjust accordingly.

5. Think long term

If you think the world is really going to pieces, the only safe investment is dried food and a shotgun. But if history is any guide, that result is unlikely. No matter how doom-laden things feel at any moment, if you wait a while, the world economy will bounce back. Instead of investing for next week, or even next year, think long term.

6. Invest Canadian

People who bought U.S. investments when the loonie was above par are in the money now even if those investments did nothing. Similarly, the lower the Canadian dollar goes, the better it is to invest in Canadian stocks. Historically the U.S. and Canadian currency do a dance — sometimes one higher, sometimes the other. The moment when each of those things will occur is notoriously difficult to predict. But generally when the loonie is low, Canadian companies that sell either domestically, or to our biggest trading partner, will do well.

7. Avoid looking at your portfolio

Financial Markets Wall Street

When markets go haywire, it's easy to feel overwhelmed and helpless. (Richard Drew/Associated Press)

If you have decided to liquidate your assets and head for the hills, so be it. But once you have decided to ride it out and play your investments for the long term, stop torturing yourself. For some people, daily checks on their portfolio are the spice of life. But if that's not you, then refuse to drive yourself crazy.

8. Do something useful with your life

The world of finance is only a tiny, tiny part of life.  Economies are strong when we help our neighbours, when we feed our children, when we participate in community activities, when we laugh, when we work hard. When it feels as if the whole world is going to hell in a handcart, try to make your small part of it better. Get out and be useful.   


Anda sedang membaca artikel tentang

Markets got you down? Here are 8 ways to weather the storm: Don Pittis

Dengan url

http://beritaluarindo.blogspot.com/2014/10/markets-got-you-down-here-are-8-ways-to.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

Markets got you down? Here are 8 ways to weather the storm: Don Pittis

namun jangan lupa untuk meletakkan link

Markets got you down? Here are 8 ways to weather the storm: Don Pittis

sebagai sumbernya

0 komentar:

Posting Komentar

techieblogger.com Techie Blogger Techie Blogger